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Thursday, August 22

Some of the largest moves among US mega-cap stocks include: Broadcom Inc (AVGO) +1.9%. 

Recent economic data releases have highlighted a softening labor market in the U.S., with initial jobless claims at 232,000 for the week ending August 17th. This increase supports expectations of potential rate cuts by the Federal Reserve throughout this year as outlined by recent trends and revisions in nonfarm payrolls.

In Europe, Germany's economy continues to show signs of weakness with its Composite PMI dropping further into contraction territory at 48.5 for August, driven largely by declines in both manufacturing and services sectors. Conversely, France has shown some resilience; its Composite PMI rose sharply to 52.7 due primarily to strong performance from the services sector linked partly to demand boosts from events like Paris Olympics preparations.

Market participants are also closely watching central bank activities ahead of key speeches such as Fed Chair Jerome Powell’s address at Jackson Hole on Friday which is anticipated heavily given current discussions around monetary policy adjustments amidst ongoing global economic uncertainties.

Bitcoin (BTC/USD) [-0.5%]
Bitcoin's price has recently displayed volatility, dipping below 50,000 earlier this month before recovering slightly. Currently, Bitcoin spot ETFs have seen inflows totaling 39.425 million as the cryptocurrency surpassed 61,000. This surge comes amid broader market uncertainties and coincides with recent economic data showing rising unemployment and falling inflation in the U.S. Expectations for Federal Reserve rate cuts in September are also contributing to an optimistic sentiment towards risk assets like Bitcoin. Additionally, analysis of the BTC/USDT four-hour chart suggests a positive outlook, indicating that reclaiming the 62,000 level could facilitate a breakout towards 68,000.

VanEck Semiconductor ETF (SMH) [+0.7%]
The VanEck Semiconductor ETF (SMH) has seen a price increase of 0.5% since Wednesday, driven by notable performances from its holdings. Nvidia (NVDA) contributed positively, anticipating strong Q2 earnings for fiscal 2025, despite delays in the Blackwell chip launch. Analysts from KeyBanc and Raymond James expressed confidence in the demand for Hopper GPUs and the Spectrum-X Ethernet switch. Synopsys Inc. (SNPS) also reported Q3 earnings that exceeded analyst expectations, with a year-over-year revenue growth and optimistic guidance for Q4, projecting full-year revenue growth of approximately 15%. Other contributors included Broadcom (AVGO), Texas Instruments (TXN), and AMD, all of which registered positive returns that added to the ETF's overall performance.

SCHW |-3.5%|-4.0B
Toronto-Dominion Bank has sold 40.5 million shares of Charles Schwab Corporation, reducing its ownership from 12.3% to 10.1%. This divestiture is part of TD's strategy to address potential fines related to deficiencies in its anti-money laundering program, for which it has allocated $2.6 billion in provisions. The shares were sold at a price of $61.65 each. Following this announcement, Charles Schwab's shares dropped significantly in after-hours trading, reflecting market concerns regarding the implications of this substantial share sale and ongoing regulatory scrutiny faced by TD Bank.

SNOW | -10.1% | -4.1B
Snowflake Inc. reported second-quarter revenue of $868.8 million, exceeding the consensus estimate of $849.7 million. Adjusted earnings per share were $0.18, surpassing expectations of $0.16. Despite these positive results, the stock fell approximately 8% in after-hours trading due to lower guidance for operating margins and concerns stemming from a recent cyberattack. Analysts at JMP Securities reduced their price target from $235 to $190 while maintaining a Market Outperform rating, noting a smaller-than-expected product revenue beat compared to historical averages. Other analysts also adjusted their price targets downward, reflecting cautious sentiment despite strong year-over-year growth in product revenue and remaining performance obligations. Additionally, Snowflake authorized a $2.5 billion stock repurchase program through March 2027, though concerns about high stock-based compensation and profitability challenges persist.

BJ |-7.0%|-753.2M
BJ's Wholesale Club Holdings Inc reported fiscal Q2 2024 results, with total revenues of 5.21 billion, exceeding the consensus estimate of 5.15 billion and reflecting a year-over-year increase. Adjusted EPS was 1.09, surpassing the forecast of 1.00. Comparable club sales rose by 3.1%, bolstered by a significant 22% growth in digitally enabled sales. Membership fee income increased to 113.1 million, up 9.1%. The company reaffirmed its fiscal 2024 adjusted EPS guidance of 3.75 to 4.00, anticipating comparable club sales growth of 1% to 2%, excluding gasoline sales. Following the earnings announcement, BJ's stock dropped significantly, moving down by 8.7% within 40 minutes, despite share repurchases totaling 40.4 million during the quarter, aimed at enhancing shareholder value.

TD |-2.8% | -2.8B
Toronto-Dominion Bank reported a provision of C$3.57 billion (approximately US$2.6 billion) in its third-quarter results, linked to ongoing investigations into its anti-money laundering practices by U.S. regulators. This follows a previous provision of C$450 million for fines. In response, TD sold 40.5 million shares of Charles Schwab, reducing its stake from 12.3% to 10.1%. The bank's net loss for the quarter was C$181 million, or C$0.14 per share, a stark contrast to a profit of C$2.88 billion in the same period last year. Adjusted earnings per share were C$2.05, below analysts' expectations of C$2.07. Revenue, however, surpassed estimates at C$10.4 billion compared to the anticipated C$9.2 billion.

ZM |+2.9% | +550.4M
Zoom Video Communications reported second-quarter earnings of $1.39 per share, exceeding the consensus estimate of $1.21. Revenue reached $1.16 billion, surpassing expectations of $1.15 billion and reflecting a year-over-year increase of 2.09%. Enterprise revenue rose to $682.8 million, up 3.5% year-over-year. For the third quarter, Zoom projected earnings per share between $1.29 and $1.31, alongside revenue guidance of $1.16 billion to $1.165 billion, both above analyst estimates. The company raised its fiscal year 2025 revenue outlook to between $4.63 billion and $4.64 billion, adjusting EPS guidance to between $5.29 and $5.32. Despite a 12% decline in enterprise customer revenue, large accounts grew by 7.1% year-over-year. Additionally, the resignation of the CFO was announced amid discussions regarding potential share buybacks or dividends. Following these announcements, the stock increased by approximately 4%.

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